Brown v. Pfeiffer

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

Shatara Brown, Nikoe Lee, and Case No. 19-cv-3132 (WMW/KMM)

Colleana Young,

Plaintiffs,

ORDER ENTERING CONSENT

v. DECREE

Reese Pfeiffer, Fruen & Pfeiffer LLP, and

M Fruen Properties LLC,

Defendants.

United States of America, Case No. 20-cv-1974 (WMW/KMM)

Plaintiff,

ORDER ENTERING CONSENT

v. DECREE

Reese Pfeiffer; Jeanne Pfeiffer; Michael Fruen;

Jeremy Martineau; Fruen & Pfeiffer, LLP; and

M. Fruen Properties, LLC,

Defendants.

This matter is before the Court on the August 23, 2021 joint motion for entry of a

proposed consent decree filed by Plaintiff United States of America. United States of

America v. Pfeiffer, No. 20-cv-1974 (WMW/KMM), Dkt. 76 (D. Minn. Aug. 23, 2021).

The Consent Decree represents an agreement between the parties to resolve disputes in

the two related above-captioned cases regarding alleged violations of the Fair Housing

Act (FHA), 42 U.S.C. §§ 3601 et seq. For the reasons addressed below, the motion for

entry of the Consent Decree is granted.

BACKGROUND

On December 19, 2019, Plaintiffs Shatara Brown, Nikoe Lee, and Colleana Young

commenced a civil-rights action against Defendants Reese Pfeiffer, Fruen & Pfeiffer LLP,

Michael Fruen, and M Fruen Properties, LLC, alleging sexual harassment in housing in

violation of the FHA. Brown v. Pfeiffer, No. 19-cv-3132 (WMW/KMM), Dkt. 4

(D. Minn. Dec. 19, 2019).

On September 16, 2020, the United States commenced a civil-rights action

alleging that Reese Pfeiffer, acting as an agent of Defendants Jeanne Pfeiffer, Michael

Fruen, Jeremy Martineau, Fruen & Pfeiffer, LLP, and M. Fruen Properties, LLC, violated

the FHA by discriminating against tenants and prospective tenants on the basis of sex in

the rental of dwellings owned by Defendants, and managed by Reese Pfeiffer, in and

around Minneapolis, Minnesota. United States of America v. Pfeiffer, No. 20-cv-1974

(WMW/KMM), Dkt. 1 (D. Minn. Sept. 16, 2020). Specifically, the United States alleges

that, from at least 2009 through the present, Reese Pfeiffer subjected multiple female

tenants to severe, pervasive and unwelcome sexual harassment and retaliation. Id. The

United States alleges that Defendants’ conduct constitutes a pattern or practice of denying

to a group of persons the rights protected by the FHA and that such conduct raises an

issue of general public importance.

The parties now jointly move for entry of a proposed consent decree (Consent

Decree). The Consent Decree represents a compromise of the disputed claims in the

above-captioned cases. The Consent Decree is not an admission of liability by any

Defendant and is not intended to be construed as an admission of liability.

ANALYSIS

In cases implicating important public interests, the Eighth Circuit has recognized

that district courts have a role in approving settlement agreements. See, e.g., EEOC v.

Prod. Fabricators, Inc., 666 F.3d 1170, 1172–74 (8th Cir. 2012) (reversing district

court’s rejection of consent decree involving alleged violation of Americans with

Disabilities Act); United States v. BP Amoco Oil PLC, 277 F.3d 1012, 1018–21 (8th Cir.

2002) (affirming approval of consent decree involving environmental cleanup). “Public

law settlements are often complicated documents designed to be carried out over a period

of years, . . . so any purely out-of-court settlement would suffer the decisive

[disadvantage] of not being subject to continuing oversight and interpretation by the

court.” Prod. Fabricators, 666 F.3d at 1173 (omission in original) (quoting Local No.

93, Int’l Ass’n of Firefighters v. City of Cleveland, 478 U.S. 501, 523 n.13 (1986)). The

decision whether to approve a consent decree rests within the discretion of the district

court. Id. at 1172.

Here, the Consent Decree implicates significant public interests—namely,

enforcing the FHA and the civil rights protected thereunder. In addition, the Consent

Decree is a complex document that includes obligations to be fulfilled over an extended

period of time. These obligations involve the management of numerous residential

properties, education and training as to the FHA, and compensation of aggrieved persons.

Such obligations may require continuing oversight and interpretation by a court. A

district court “is more than a recorder of contracts from whom parties can purchase

injunctions,” however. Id. (internal quotation marks omitted). Accordingly, before

entering a proposed consent decree, this Court must find that the proposed consent decree

is (1) procedurally fair, (2) substantively fair, (3) reasonable and (4) consistent with the

governing law. See United States v. Hercules, Inc., 961 F.2d 796, 800 (8th Cir. 1992);

United States v. Cannons Eng’g Corp., 899 F.2d 79, 85–93 (1st Cir. 1990).

I. Procedural Fairness

“To measure procedural fairness, a court should ordinarily look to the negotiation

process and attempt to gauge its candor, openness, and bargaining balance.” Cannons,

899 F.2d at 86; accord BP Amoco, 277 F.3d at 1020. The reviewing court should

determine whether the government and the settling defendant were “negotiating in good

faith and at arm’s length” when crafting the proposed consent decree. BP Amoco, 277

F.3d at 1020.

Here, the parties’ motion does not expressly address procedural fairness. But the

record reflects that all the parties are represented by counsel. And the parties participated

in multiple settlement conferences and status conferences with United States Magistrate

Judge Katherine M. Menendez, over the course of several months, before finalizing the

terms of the Consent Decree. Moreover, the Consent Decree is signed by the parties and

their respective counsel. Accordingly, the record establishes that the Consent Decree is

procedurally fair.

II. Substantive Fairness

“Substantive fairness introduces into the equation concepts of corrective justice

and accountability: a party should bear the cost of the harm for which it is legally

responsible.” Id. (quoting Cannons, 899 F.2d at 87). When reviewing a consent decree

for substantive fairness, a district court does not examine “whether the settlement is one

which the court itself might have fashioned, or considers as ideal, but whether the

proposed decree is fair, reasonable, and faithful to the objectives of the governing statute.”

Cannons, 899 F.2d at 84.

Here, if the Court enters the Consent Decree, Defendants will be enjoined from

future violations of the FHA and required to implement measures designed to prevent

future violations, including participation in training programs regarding the FHA with

specific emphasis on sex discrimination and sexual harassment. In addition, aggrieved

persons will be monetarily compensated for their alleged past injuries. Defendants also

will be required to pay a civil penalty to the United States to vindicate the public interest.

Accordingly, the record demonstrates that the Consent Decree is substantively fair.

III. Reasonableness

A court evaluating a proposed consent decree for fairness and reasonableness

should assess “(1) the basic legality of the decree; (2) whether the terms of the decree,

including its enforcement mechanism, are clear; (3) whether the consent decree reflects a

resolution of the actual claims in the complaint; and (4) whether the consent decree is

tainted by improper collusion or corruption of some kind.” SEC v. Citigroup Glob. Mkts.,

Inc., 752 F.3d 285, 294–95 (2d Cir. 2014) (internal citations omitted); see also Angela R.

ex rel. Hesselbein v. Clinton, 999 F.2d 320, 325 (8th Cir. 1993) (concluding that district

court abused its discretion by approving consent decree that did not properly define the

enforcement mechanisms). Protection of the public interest is an important, overarching

consideration. United States v. Akzo Coatings of Am., Inc., 949 F.2d 1409, 1435 (6th Cir.

1991) (addressing a consent decree involving environmental cleaning).

Here, the basic legality of the Consent Decree is supported by the record and the

relevant law. Injunctive relief, monetary damages, and civil penalties are appropriate

forms of relief in cases asserting violations of the FHA. 42 U.S.C. §§ 3613(c) (relief

available in action for enforcement by private persons); 3614(d) (relief available in action

for enforcement by attorney general). These forms of relief also are consistent with the

allegations in the complaints. Accordingly, the legality of the Consent Decree is clear

and its terms are appropriate, proportionate and reflect a resolution of the actual claims in

the complaints.

To be reasonable, the terms of a consent decree, including its enforcement

mechanisms, also must be clear. See Hesselbein, 999 F.2d at 325. The enforcement

mechanism must clearly define who may bring an enforcement action and the bases and

manner for doing so. See id. Here, the Consent Decree provides, among other things,

that if “any Defendant, their agent, or their employee engages in any future violation(s) of

the FHA, such violation(s) shall constitute a ‘subsequent violation’ pursuant to 42 U.S.C.

§ 3614(d)(1)(C)(ii).”1 The Consent Decree also includes provisions authorizing the

United States to review compliance with the Consent Decree through testing and

inspection of records, and permits the United States to move this Court “to extend the

period of the non-permanent terms of this Consent Decree if one or more Defendants

1 The FHA provides that a court “may, to vindicate the public interest, assess a civil

penalty . . . in an amount not exceeding $100,000, for any subsequent violation.” 42

U.S.C. § 3614(d)(1)(C)(ii).

violates any term of the Consent Decree,” with any such extension applying only to the

Defendants who have violated the Consent Decree. Finally, the Consent Decree provides:

The Parties to this Consent Decree shall endeavor in good

faith to resolve informally any differences regarding

interpretation of and compliance with this Consent Decree

prior to bringing such matters to the Court for resolution.

However, in the event the United States contends that there

has been a failure by any Defendant, willful or otherwise, to

perform in a timely manner any act required by this Consent

Decree or otherwise to act in conformance with any provision

thereof, the United States may move this Court to impose any

remedy authorized by law or equity, including, but not limited

to, an order requiring performance of such act or deeming

such act to have been performed, and an award of any

damages, costs, and reasonable attorneys’ fees occasioned by

the violation or failure to perform.

The Court finds that these terms clearly define who may bring an enforcement action, for

what types of violations, and in what manner.

Finally, there is no evidence that the Consent Decree is tainted by improper

collusion or corruption, nor does the Consent Decree disserve the public interest. The

injunctive and monetary relief outlined in the Consent Decree appropriately and

adequately serve the public interest.

For all the foregoing reasons, the Consent Decree is reasonable.

IV. Consistency with Governing Law

A consent decree also must be consistent with the overarching principles of the

governing law. See Cannons, 899 F.2d at 90–93. The FHA provides that “[i]t is the

policy of the United States to provide, within constitutional limitations, for fair housing

throughout the United States.” 42 U.S.C. § 3601. Enforcement actions under the FHA

may be commenced by either aggrieved persons or the Attorney General. See 42 U.S.C.

§§ 3613(a), 3614(a). In cases alleging violations of the FHA, district courts have the

authority to grant appropriate injunctive relief and order the payment of monetary

damages and civil penalties. See 42 U.S.C. §§ 3613(c), 3614(d). Accordingly, the

Consent Decree is consistent with the laws that govern this dispute.

ORDER

Based on the foregoing analysis and all the files, records and proceedings herein,

IT IS HEREBY ORDERED:

1. The parties’ joint motion for entry of a proposed consent decree, (Dkt. 76),

is GRANTED.

2. The Court retains jurisdiction over this matter for the purpose of enforcing

the terms of the Consent Decree, a fully executed copy of which is filed with this Order.2

LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: October 25, 2021 s/Wilhelmina M. Wright

Wilhelmina M. Wright

United States District Judge

2 The fully executed copy of the Consent Decree filed with this Order has been

revised to correct typographical errors identified by the Court but has not been

substantively altered.